Greetings, and welcome to the ClearPoint Neuro, Inc.'s Second Quarter 2025 Financial Results Conference Call. As a reminder, this conference is being recorded. Comments made on this call may include statements that are forward-looking within the meaning of securities laws. These forward-looking statements may include, without limitation, statements related to anticipated industry trends, the company's plans, prospects, and strategies, both preliminary and projected, the size of total addressable markets or the market opportunity for the company's products and services, the company's expectation for future development, regulatory approval and the market for cell and gene therapies and the anticipated adoption of the company's products and services for use in the delivery of gene and cell therapies and management's expectations, beliefs, estimates or projections regarding future revenue, results of operations or the adequacy of cash and cash equivalent balances to support operations and meet future obligations. Actual results or trends could differ materially. The company undertakes no obligation to revise forward-looking statements for new information or future events. For more information, please refer to the company's annual report on Form 10-K for the year ended December 31, 2024, and the company's quarterly report on Form 10-Q for the 3 months ended March 31, 2025, both of which have been filed with the Securities and Exchange Commission, and the company's quarterly report on Form 10-Q for the 3 months ended June 30, 2025, which the company intends to file with the Securities and Exchange Commission on or before August 14, 2025. All the company's filings may be obtained from the SEC or the company's website at www.clearpointneuro.com. It is now my pleasure to turn the call over to Joe Burnett, Chief Executive Officer. Please go ahead.

Thank you, Kevin, and thank you to all of the investors, partners, and analysts joining us on today's call. 2025 is off to a terrific start here at ClearPoint Neuro as we have officially entered the third phase of our company history, a phase we refer to as Fast. Forward. As a brief reminder, this new stage at ClearPoint has 3 primary tenets. First, we will extend our lead in cell and gene therapy by leveraging our complete and unique drug delivery ecosystem, including navigation hardware, predictive modeling and monitoring software, cannula-based routes of administration, preclinical and clinical drug discovery services, and best-in-class clinical field personnel. We will use this ecosystem to support our more than 60 active biopharma partners on their path to regulatory approval and commercialization, many of which have already been selected for some form of expedited review by the FDA. This now includes the very first U.S.-based commercial cases for neuro cell and gene therapy that have ever been performed as announced just last week. Second, we will evolve our portfolio to focus not only on accuracy and precision, but also on fast, simple, predictable workflows. These new product introductions are designed to increase hospital efficiency and throughput and to create capacity for the significant demand that we believe is coming when patients learn that these new restorative therapies are available and have proven effective. Both our 3.0 ClearPoint ICT navigation software for the operating room and our PRISM Laser Therapy system have been excellent new product introductions and live up to this mantra of fast, simple, and predictable. And third, we will expand our global installed base and generate scale to enable more patients around the world to access the ClearPoint ecosystem that will be used for these novel treatments. ClearPoint technology is now available at more than 100 centers around the world and has regulatory clearance in 36 countries and growing. As previously announced, we have now successfully secured the foundational funding necessary to execute on the strategy for many years to come. This capital in the form of both debt and equity has been provided by our new partner, Oberland Capital. Oberland has demonstrated that they very much share our vision of securing ClearPoint as the true gold standard for neuro cell and gene therapy delivery and extending that lead for years to come. I will now turn the call over to Danilo D'Alessandro, our CFO, to discuss the financial details of the second quarter, after which I will provide additional commentary on our progress in these 3 Fast. Forward initiatives here in the second half of 2025. Danilo?

Thank you, Joe, and good afternoon, everyone. Looking at the second quarter 2025 results, total revenue was $9.2 million for the 3 months ended June 30, 2025, and $7.9 million for the 3 months ended June 30, 2024, which represents 17% growth versus the second quarter of 2024. As a reminder, our revenue is made up of 3 components: biologics and drug delivery, neurosurgery navigation and therapy, and capital equipment and software. Biologics and drug delivery revenue includes sales of disposable products and services related to customer-sponsored preclinical and clinical trials utilizing our products. Biologics and drug delivery revenue increased 10% to $4.7 million in the second quarter, up from $4.3 million in 2024. This increase was fueled by a 12% increase in biologics and drug delivery product revenue as multiple pharmaceutical customers progressed in their preclinical and clinical development and an 8% increase in service revenue. Neurosurgery navigation revenue consists of commercial sales of disposable products related to cases utilizing the ClearPoint system, the PRISM Laser System, or SmartFrame OR. This revenue segment increased 33% to $3.4 million for the second quarter of 2025. The revenue growth is primarily attributable to our new product offerings and our new recent additional placements. Capital equipment and software revenue, consisting of sales of ClearPoint reusable hardware and software and related services increased 11% to $1 million in the quarter. The increase was driven by an increase in service revenue. Gross margin for the second quarter 2025 was 60% compared to a gross margin of 63% for the second quarter of 2024. The decrease in gross margin is primarily due to higher excess and obsolete inventory reserves for the 3 months ended June 30, 2025. In the second quarter of 2025, our operating expenses were $11.2 million compared to $9.7 million for the second quarter of 2024, an increase of 16%. Specifically, research and development costs were $3.8 million for the 3 months ended June 30, 2025, compared to $3.1 million for the same period in 2024, an increase of $0.7 million or 23%. The increase was due primarily to higher product and software development costs as we invest in expanding and upgrading our product offering. Sales and marketing expenses were $4 million for the second quarter compared to $3.8 million for the same period in 2024, an increase of $0.2 million or 5%. This increase was due primarily to additional personnel costs, including share-based compensation, resulting from increases in headcount of $0.4 million, partially offset by lower travel costs and other marketing costs of $0.2 million. General and administrative expenses were $3.4 million for the second quarter compared to $2.8 million for the same period in 2024, an increase of $0.6 million or 23%. This increase was due primarily to a higher bad debt expense of $0.4 million and higher personnel costs, including share-based compensation of $0.2 million. At June 30, 2025, the company had cash and cash equivalents totaling $41.5 million compared to $20.1 million at December 31, 2024, with the increase resulting from the net proceeds of the note payable and stock offerings of $32 million, partially offset by the use of $8.7 million in cash for operating activities. Our operational cash burn in Q2 was $2.6 million, broadly in line with the operational cash burn of the second quarter of 2024. With that, I'd like now to turn the call back to you, Joe.

Thank you, Danilo. The team has continued to deliver strong results here in the second quarter, both financially and strategically. From a financial perspective, we achieved record revenue, benefiting from sales contributions across all 4 of our growth pillars. Strategically, we were able to achieve key milestones that give us confidence that we will see continued growth across our entire portfolio. This is an exciting phase for the company, which, again, we've called Fast. Forward. It's exciting because we now have multiple growth vectors taking shape all at the same time. These various vectors include: the expansion into the operating room using both MRI and CT, the expansion into the laser therapy and access market, the expansion of regulatory clearances into new geographies, the addition of multiple new biopharma partners, the addition of new products and services to offer those biopharma partners, the expansion of our site capacity for larger preclinical and GLP studies, and the progression of pharma partners into larger Phase III clinical trials and eventual commercialization of these new-to-world cell and gene therapies. All of this is taking place against the backdrop of our strongest cash position in years and the confidence to use that capital to move each and every one of these growth vectors forward. As always, let's dig a bit deeper into this progress with regard to our 4 growth pillars. Starting with pillar number one, biologics and drug delivery. Our strategy once again is to extend our lead in cell and gene therapy delivery. Our biologics and drug delivery team continue to support more than 60 active partners in the biopharma space at all phases of development, including preclinical testing, clinical trial execution, and even global commercialization. We have successfully entered a long-term lease for our new expanded preclinical research facility and began construction late in the second quarter in preparation of adding capacity and offering new capabilities to our network of biopharma partners. We believe that this expanded facility in Torrey Pines, California, will be operational here in the second half of 2025. In addition, numerous partners have enrolled patients in global regulatory trials, including those partners who have been accepted into one of the FDA expedited review programs. In the second quarter, we submitted our 510(k) for the SmartFlow Cannula for use with REGENXBIO gene therapy RGX-121. This submission is once again a cross-labeled combination product is being reviewed in parallel with the REGENXBIO BLA, which the company announced was accepted by the FDA for review. RGX-121 is intended for use in children with MPS II, also known as Hunter syndrome. The PDUFA date is scheduled for November of this year. Another one of our partners, Solid Biosciences, has also communicated that they have earned expedited review status by the FDA and will begin renewed clinical strategy discussions with the FDA in support of an eventual BLA submission to treat another debilitating disease called Friedreich's ataxia, which is estimated to impact more than 5,000 patients in the United States alone. This brings the total number of ClearPoint neuro-related programs that have been accepted to the FDA expedited review up to 9. In addition, the ICD-10 Coordination and Maintenance Committee has included new neuro infusion-specific ICD-10-PCS codes, which will be effective October 1, 2025, and will assist in tracking commercial use of the SmartFlow Cannula and eventually other device technologies directly to the brain. ClearPoint submitted the application for these new codes earlier this year. We also announced a record number of cell and gene therapy infusions in July performed either commercially or as part of registered clinical trials, including 17 global patients treated across 11 different drug platforms. This demonstrates the continued progression of our more than 60 active partners through the regulatory approval process. We believe that additional cell and gene therapy platforms with significantly underserved patient populations have the potential to be approved within the next 2 to 3 years. ClearPoint Neuro has established or is actively collaborating with multiple partners to establish commercial supply agreements to ensure readiness for the launch of these new therapies. Next, let's talk about pillars number two and number three, which today represent neurosurgery navigation and laser ablation. Our goal for this segment is to introduce new products that are not only precise and accurate, but are also fast, simple, and predictable so that we can help hospitals increase throughput and create capacity for these future drug delivery patients. This segment saw our single-use consumables grow 33% in the second quarter, primarily driven by the introduction of our new 3.0 operating room navigation software and gains in laser ablation market share with our PRISM Laser Therapy system. The 3.0 navigation software has been very well received during the first 3 months since FDA clearance, and the products moved into full market release here in the second quarter. This has been the fastest technology deployment in our history. And as of today, the 3.0 navigation software is already available in 35 new or existing sites here in the United States. The product is delivering on our promise of fast, simple, predictable procedures and the early clinical performance is combining accuracy with efficiency as seen in the data collected during our limited market release. So far, we have seen average radial errors less than 1 millimeter and average skin-to-skin procedure times of around 2 hours even for bilateral deep brain stimulation procedures. This is all despite the fact that these cases were often the very first experience for these surgeons with our operating room product, and we expect additional time savings with workflow familiarity and optimization. Yet again, this efficiency is being achieved without sacrificing accuracy and precision. Also impressive was that the cumulative radiation dose of these efficient bilateral procedures was less than that of a single full diagnostic head scan. One of the surgeons even commented that with this level of efficiency and predictability, it would be possible to schedule 3 surgeries in a single day. Another exciting theme was the early release of 3.0 surrounds the clear and unique flexibility of the system to work in both the MRI suite and in the operating room. In the second quarter, we had multiple examples where the preplanning for the surgery had taken place inside the ClearPoint software. However, the MRI magnet went down with the patient ready for surgery. In years past, the patient may have been sent home or treated with another operating room navigation system, meaning ClearPoint would have lost the case. In these examples, the ClearPoint procedure simply pivoted out of the MRI and into the operating room, leveraging all of the preplanning and preparation that had already taken place. These are cases that ClearPoint does not have to lose anymore when an issue arises with the MRI magnet. Similarly, our PRISM Laser Therapy system workflow got a boost with the new 3.0 software, making planning and imaging more compatible with both the ClearPoint navigation system and other common workflows like robotics. We have made gains in market share despite being limited to only 3.0 Tesla-powered scanners, which we estimate represents about half of the available market today. We have since submitted the data required by the FDA to achieve compatibility with 1.5 Tesla scanners and expect to have access to the other half of the market sometime in the second half of this year. Our laser therapy case volumes continue to increase. And after 1 year of full market release, we estimate to have achieved between 5% and 10% of the neuro laser therapy market here in the United States. And finally, moving to our fourth pillar of achieving global scale, we continue to make significant progress expanding our installed base and hospital support infrastructure as well as pursuing global regulatory clearances. In the second quarter, we activated 2 additional new sites. As mentioned last quarter, our priorities in the first half of 2025 have been executing the 3.0 and PRISM launches at existing accounts where we already have familiarity, specialist coverage, and customer service enabled. In the second half, we plan to once again accelerate new site activations here in the U.S. We continue to expect total 2025 activations to be between 15 and 20 new sites, which would equate to between 11 and 16 new sites activated here in the second half. For perspective, we have already added 2 additional sites here in the third quarter and still have 7 weeks to go in Q3. At present, we have approximately 30 potential customers in our near-term capital funnel, which we believe have a chance to activate before the end of the year, and we estimate that we can activate about half of those targets by December 31 and the rest in 2026. ClearPoint currently has regulatory clearances supporting 36 countries around the world, and this does not include additional countries where the regulatory approval process has been initiated, including Canada, Japan, and China. The global reach is another significant sales tool that helps ClearPoint extend our lead in drug delivery as this expansive global product placement is yet another significant barrier to have to replicate. Our operating expense growth in the quarter mirrored our revenue growth with an operating burn almost identical to Q2 of 2024. As a management team, we will continue to balance scalable financial performance with the appropriate investments required to build a moat around ClearPoint as the gold standard for neuro cell and gene therapy delivery. Our plan is to continue to extend our lead and be responsive to our active pharma partners who again are telling us that it's time to get ready. With that, I would like to open up the call to any questions.

Our first question today is coming from Frank Takkinen from Lake Street Capital Markets.

I was hoping maybe I could start with some more color around the biologic partner opportunity. Clearly, you're making good progress across the board there. I was hoping you could refresh us more on kind of revenue contribution from KEBILIDI and how that may work into the model? And then a second part to that, just thoughts around uniQure, what should we be looking for in the back half of the year in advance of that? I think it's a Q1 2026 decision date that is expected.

Yes, happy to answer your question, Frank. The first two opportunities I think we have are KEBILIDI in the United States and globally, as well as the REGENXBIO platform, which could be approved later this year. These are both very rare single-gene mutation disorders that show excellent results with therapy, but they affect very small and often remote patient populations. It's possible that these patients are underdiagnosed, meaning that once awareness increases about the available treatment, more patients may seek blood tests to confirm their conditions. However, from a business perspective, we do not anticipate these will be major revenue drivers in the near term. They are more symbolic and serve as important milestones as we navigate hospital systems and work with pharmacies to ensure the necessary equipment is in place for proper drug filing. They serve as a dress rehearsal for larger market opportunities that lie ahead, particularly regarding uniQure and its treatment for Huntington's disease. In comparison, the global patient numbers for these initial two rare disorders are in the tens or hundreds, while for Huntington's disease, it's estimated that there are around 70,000 symptomatic patients in Western Europe and the United States alone. This estimate does not include the 130,000 individuals who carry the Huntington's gene but may not yet show symptoms. Therefore, the potential market for uniQure's treatment is significantly larger. Considering Huntington's disease as our next major opportunity, it’s critical for patients to receive treatment as soon as possible. UniQure's recent data showed a halt in disease progression, indicating that while it may not restore lost function, it can prevent further decline. Patients will want to initiate treatment without delay, rather than waiting for disease worsening. We are currently collaborating with hospital and regional treatment centers to find capacity to accommodate an additional 1,000 to 5,000 patients quickly. To put this into perspective, achieving a target of 5,000 additional patients requires about 20 academic centers, each capable of performing one procedure a day, which shows it’s manageable and not an overwhelming challenge. It's time for hospitals to begin planning for this, as treatment availability is approaching rapidly. Moreover, other programs in expedited review, such as those for Friedreich's ataxia, frontal temporal lobe dementia, Parkinson's disease, and epilepsy, present significantly larger opportunities compared to the rare childhood disorders we are currently addressing.

Got it. That's very helpful. And then maybe on ClearPoint 3.0, it sounds like you're having strong receptivity to that as well. Where do you stand in maybe rolling it out to the rest of the installed base? And maybe any metrics you can provide around the contribution that this has driven to the model and the margin impact of that would be great to understand.

Yes. As of now, I do not believe there is any impact on margins, so it remains a very profitable procedure for us. The capital requirements are significantly reduced. For a new hospital looking to adopt ClearPoint for the first time, the only capital they need is the ClearPoint workstation and software. They do not have to invest in titanium instruments, new head coils, or an MRI monitor. This lowers the barrier to entry, allowing us to begin using disposables or consumables immediately, which maintain margins similar to those from MRI procedures. In fact, it uses the same MRI kit, now labeled for both MRI and CT compatibility. This means a hospital can stock one product and use it for both MRI and CT cases, which has been very positively received. We announced that 35 sites now have the 3.0 or 3.01 software installed, with 21 or 22 of those already performing procedures. This marks our fastest deployment yet. We are also focusing on high-volume academic centers to potentially shift some of their DBS procedures from MRI to operating rooms with this product, thereby creating capacity for clinical trials in drug delivery and future commercial cases.

Next question is coming from Anderson Schock from B. Riley Securities.

Congrats on all the progress.

Thank you.

Yes. So first, on your cell and gene therapy partners, will all these therapies be delivered under live MRI? Or can they also be delivered in the OR under CT guidance?

It varies. Not all procedures will be conducted under live MRI guidance. It's crucial to understand that we offer a variety of products for these procedures. For instance, we have the cannula, which provides the route for administration, directly interacting with the patient's blood and the drug. The flow rates, viscosity, and other factors are meticulously controlled, making them essential. So far, we have noticed that the FDA and other regulatory bodies seem to be gearing towards approving the drugs and the cannula as combination products. Based on our 60 partners, we expect that the majority will integrate ClearPoint technology, particularly through the cannula, which is likely to gain approval as a combination device. While this is a key aspect, other elements are more dependent on technology and location. Some partners prefer to retain control over the surgical process. Most pharmaceutical companies acknowledge the significant risk involved—not just in getting drug approval but ensuring that once it's approved, the implementation doesn’t lead to issues that could affect the entire market. If a limited number of surgeons using a particular technique yield poor results, it could raise concerns for insurance companies, especially given the high costs of these drugs. Consequently, many partners want a highly controlled surgical process at launch, often utilizing ClearPoint MRI guidance. This not only ensures consistency in planning and execution but also allows for real-time observation of the drug infusion, which is vital for quality control. A significant number of partners are intending to use some form of MRI guidance with ClearPoint at this point, although some others might initially skip MRI guidance or plan to evaluate its effectiveness in subsets. This is especially true for certain cell therapy programs where the volume injected is less, making infusion less visible on MRI. In such cases, conducting procedures in the operating room may be more suitable. We have a diverse range of partnerships; these collaborations go beyond navigation—they involve the cannula, our clinical support, preclinical research, GLP capabilities, and predictive modeling software. Even if a partner opts out of using the navigation part of our offerings, they are still considering various other products that could serve as potential revenue streams.

Okay. That makes sense. It seems that most will be utilizing MRI guidance. How should we consider the limitations of MRI suite availability and its effect on the rollout of these therapies?

Yes, I was discussing how we can enhance capacity within the MRI scanner. A key approach is to implement faster and more efficient procedures in the operating room that still enable teams to familiarize themselves with ClearPoint. Just to reiterate, using ClearPoint software in the operating room requires the same hardware and software as in the MRI. Each procedure performed in the operating room serves as practice for future MRI procedures involving drug delivery. This acts as a proving ground, helping to improve hospital efficiency and streamline procedures. For example, where a typical MRI procedure used to take 3 hours, we're now bringing it down to 2 hours in the operating room. If a team performs 100 of these procedures, can we reduce the time to 1 hour or even 90 minutes? Enhancing efficiency will create more MRI and operating room time and increase physician capacity for these procedures. Another important factor is the expansion of MRI capabilities. More MRIs are being installed, such as Siemens' Free.Max system, which features a half Tesla magnet that is much easier to install and requires significantly less shielding. We've completed preliminary testing on this next-generation, lower-cost magnet, giving us confidence that ClearPoint procedures can be done with it. When constructing a new hospital wing for these procedures, it's practical to utilize these lower power, lower-cost magnets that still meet our needs. This is also a consideration for companies in the MRI industry. Lastly, we need to ensure that when we treat a patient in the operating room without MRI guidance, they still have the best chance for success. Our AI platforms, including Maestro and our partnership with New England Scientific in biophysical modeling, are crucial here. We can compare our predictive software model with the actual results of MRI-guided procedures used in clinical trials. If we can demonstrate that our model accurately predicts the drug's spread based on the results from the first 100 patients in the trials, we can confidently assert that we can perform these procedures in the operating room, as we understand the drug's distribution. This is contingent on maintaining the sub-millimeter accuracy that ClearPoint offers. In summary, we're pursuing three key strategies to enhance capacity and ensure that MRI does not become a bottleneck.

Okay. Got it. That's very helpful. And then do you have any updates on the timing of GLP compliance at your expanded preclinical research facility?

I think we'll have a good sense of that pretty quickly. So I'm not ready to commit to the GLP portion. It's possible that we could do our first GLP study this year, but I think it's going to be kind of close if it happens in December time frame or in Q1 of next year. But what I would say is we've hired the people required. And now we are really just getting the facility and getting the quality system for this new facility up and running so that it meets all the necessary accreditations to be doing this kind of preclinical work.

Thank you. We reached the end of our question-and-answer session. I'd like to turn the floor back over for any further or closing comments.

Well, thanks again to everyone for joining today's call. We have spent the last 10 years building a strong foundation. And in 2025 is where we hit the fast forward button to get the market ready for this exciting future of cell and gene therapy. We are very excited to be in a position where we can directly impact many patient lives, often being in the room for the very first patient ever treated with these new technologies. Good night, and thank you for your attention.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.